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Romney health plan would cost US, group says

If Mitt Romney gets elected as president and keeps his promise to repeal the 2010 health reform law, more than 72 million Americans will be lacking health insurance by 2030 and health care costs will rise, a report from the Commonwealth Fund projects. If President Barack Obama stays in office, just 27 million will go without insurance and costs will fall, the group predicts.

There are a lot of caveats in the report issued Tuesday by the group, which does research in support of a “high-performing” health system. Romney would also need a friendly (read Republican-dominated) Congress to roll back health reform, and he hasn’t given very many details of his health plan.

Nonetheless the group, which backs the Affordable Care Act, says the Republican goal of more privatization of health insurance would cost Americans more and leave more without any health coverage.

“The Republican nominee has said that, if elected, he will work to repeal the law and replace it with his own vision for health care,” the Fund’s Karen Davis told reporters in a telephone briefing. “Romney’s plan to repeal the Affordable Care Act and replace it with block grants to states for Medicaid and new tax incentives for health plans purchased in the individual market are expected, on balance, to reduce health insurance coverage in every state,” the group says in its report.

The Romney campaign said the report was based on flawed assumptions and depicts “a fantasy world where Obamacare has been a success," according to Politico.

The health reform law has several aims: to get more people covered by health insurance, to lower skyrocketing healthcare costs and to improve medical care.

Most of its provisions don’t even take effect until 2014, when states are supposed to expand the Medicaid health insurance plan to cover more people and set up health insurance exchanges to help people choose a health insurance plan. Some of the provisions that are already in effect are popular -- such as rules requiring insurance companies to cover adult children on their parents’ plans until age 26 and restrictions on cutting off coverage for sick people. Rules requiring free vaccinations and cancer screenings are also in effect.

But Republicans say the law, passed by Congress and signed by Obama in 2010, will lead to higher costs. They especially criticize a provision requiring insurance companies and employers to provide free women’s health coverage, including birth control. They also say it greatly increases the role of the federal government in health care.

They’ve promised to repeal it, despite predictions that this might end up coosting the country more money. “According to CBO (the nonpartisan Congressional Budget Office) estimates, repeal would also end the Medicare spending reductions and higher taxes and fees in the law, increasing net Medicare spending by $716 billion over the period 2013 to 2022,” the report notes.

Few deny that U.S. health care needs improvement. The independent Institute of Medicine says the U.S. health care system wasted $750 billion in 2009, about 30 percent of all health spending, on unnecessary services, excessive administrative costs, fraud, and other problems.

The International Federation of Health Plans reported in March that Americans spend more than people in other countries on just about every medical procedure and doctor visit. It found a hospital stay costs an average of $1,825 in Spain, $5,004 in Germany and an average of $15,734 in the U.S. Health spending as a percentage of GDP, according to the group, is 17.4 percent in the U.S. versus 11.8 percent in France, where medicine is socialized, and 9.5 percent in Spain.

But Republicans and Democrats differ on how to fix this.

“With each candidate offering fundamentally different visions for the nation’s health care system, this fall’s presidential election provides a stark choice for U.S. voters,” the Commonwealth Fund report says.

“President Obama supports the goal of near-universal health insurance coverage, by maintaining existing private insurance markets but also instituting tighter and more standardized regulations across the country to ensure a broad choice of comprehensive health plans to all who seek coverage. In addition, federal tax credits would make individually purchased health plans more affordable. The Medicaid program would cover more families with low or moderate incomes,” it says.

“Governor Romney, on the other hand, has not identified universal coverage as a goal. While also supporting a health insurance system based on existing markets, he believes that more limited regulation will ensure a broad choice of health plans for consumers.” He has suggested giving states “block grants” for Medicaid, allowing them to choose more freely who can get this government-funded health insurance.

Currently, about 48.6 million Americans do without health insurance, the Census Bureau says, or just under 16 percent of the population.

By 2030, the health reform law should bring the number of people without health insurance down to 27.1 million people, the report projects. But the Supreme Court’s ruling in June that states can choose not to expand Medicaid could affect this projection.

Many states currently offer Medicaid mostly to pregnant women and children, but poor adults often are not eligible

“In contrast, the analysis projects that Romney’s proposals will increase the number and share of people who are uninsured in every state and demographic group,” it adds.

It says Romney’s proposals would leave 72 million people uninsured in 2022. Most of these people would lose insurance as states further restrict who is eligible for Medicaid, the group said. Under the health reform law, more people would be insured by Medicaid, but under Romney’s plan, even fewer would get Medicaid than already do. Romney’s team has suggested giving states “block grants” so they can more freely decide how to spend Medicaid money.

The Commonwealth Fund also says Romney’s ideas would cost people more of their own money. The health reform law is projected to reduce the cost of health insurance for people who buy it on their own -- not through an employer or government plan -- to 9 percent of their income. But Romney’s plan would raise these costs to 14 percent of income, the group said.

The report also says the Republican plan would raise Medicare costs.

“Governor Romney’s intent to repeal the law would restore the doughnut hole in Medicare’s prescription drug benefit and reinstate cost-sharing for preventive care services and annual wellness visits,” the report says. The “doughnut hole” was a byproduct of prescription drug coverage that required seniors to pay the full costs of their prescriptions for a while once they had spent a certain amount, and up to a higher point.

The group says some of Romney’s proposals would save the federal government money, but would do that by shifting the costs to individuals, not by lowering medical costs overall.

“In July, CBO estimated that a House Republican bill to repeal the Affordable Care Act would result in a $109 billion increase in the federal budget deficit over 2013–2022,” the group noted.

Romney has said his plan to let people buy insurance across state lines will lower costs and increase choice. The health care plan he signed in Massachusetts did get 98 percent of the population coverage but it did not lower costs -- and may have raised them a little. Romney has said the federal government can lower costs by reforming how we pay for health care, but he has not given any details of how he would do this in his presidential campaign proposals.

“Regardless of the outcome of the election, it will be critical for state and federal policymakers, regulators, businesses, consumers, and other key stakeholders to work together to achieve the vision of high-quality, safe health care at a price that everyone in America can afford,” it concluded.